PBD Fish Reports
Loss of Public Access
It is clear that a selloff of our public land will significantly reduce access to hunting, fishing, and other outdoor recreation opportunities. It will also lead to shortsighted and ineffective management of the land. In other words, you and I will be made worse off. We will lose value and the new land owners will gain value.
Now, in economic theory and in law, such a loss should be compensated by those who gain. You and I should be paid to give up our rights to access these, our public lands, for hunting and fishing. Not to do so would mean, essentially, that those rights were stolen from us. Can you imagine telling rich land owners they can exclude public access to the streams on their land but only if they pay you and me. That’s what should be done but it seems to me to be highly unlikely. Should a land owner wish to exclude us, he would have to contact every potential outdoor enthusiast and pay each for an agreement from them. The cost of doing this would be prohibitive. Better to steal the rights by legal maneuvering.
Let’s look at another problem with the selloff of public lands. Suppose that a parcel of public land is to be sold at auction, which is the most likely way such land would be sold. Bidders would study the land and decide on a maximum bid they would be willing to pay for the parcel. In the auction, bids would increase until the second-to-last bidder refuses to go any higher. The winning bid is just a little above the value the second bidder placed on the parcel. The parcel goes to the person or corporation who places the most value in it, just as economic theory tells us.
However, you and I and all other outdoor enthusiasts are not in the bidding process. Suppose that the highest bidder is a mining company who will strip mine the parcel. All hunting, fishing and other outdoor activities will be lost at least until the land has been reclaimed, if it ever is. You and I value the parcel for its outdoor activities. We could have joined together as representatives of an outdoor club to place a bid. However, this bid would be below the true outdoor value because while you and I might agree to pay, others may decide to wait so that they can enjoy the outdoor activities without paying. Economists call this the free rider problem. Furthermore, the process of getting all outdoor enthusiasts to join in the bid would be prohibitively expensive. We could not be an effective bidding force except through government, who could collect all our bids (think license fees) and bid for us. But why go to all this effort if we already own the land?
You and I will lose access to the land for fishing, hunting and other outdoor activities through the sale of public land. The law and economic theory require that we, the current owners, be compensated for this loss. In law, we will have been deprived of the benefits of an asset. This is not legal unless we are fully compensated for that loss. Not to do so constitutes a “Taking”, which is illegal.
In economics, in order to be certain that a change in ownership is efficient, both parties must voluntarily agree to the change. I would agree to sell my share of the ownership of public land only if I were compensated for the value of this land to me. You, and all other citizens, would also have to be compensated. Only if we all agree to the sale voluntarily is there economic proof that the transfer is efficient.
How much should this compensation be? I have no idea but it would be very substantial. Let’s take one example. Suppose I fish 100 days a year on public land (I actually fish more). Now suppose that all public land that I fish on is sold to private owners. To gain access to these now private waters I would have to pay the new owner a fee. To determine what such a fee might be let’s look at current practice for access to private land. Fishers are now charged an access or rod fee to fish private waters in most western states. Local fly shops take clients to these waters and collect the fee for the land owner. This rod fee ranges from $25 to $200 or more per person per day. If I fish 100 days a year and pay an average rod fee of $100, my total rod fees for the year would be $10,000.
Typically, there are several fishers on the private stretch of water I am fishing that day. Let’s say the average would be four people fishing at a time. That is $100,000 for the year for just one stretch of water. The capital value of these fees is $2,000,000. Multiply that by millions of acres of public land and we can see that the level of compensation required would monumental. Add to this the fact that fishers, hunters and outdoor enthusiasts spend approximately $650 million per year just on equipment for their sport. Add travel expenses and this total at least doubles. My capital value alone would be over $250,000. Obviously, outdoor enthusiasts value their outdoor activities very highly.
Since the land is being sold, we would have to be compensated each and every year or be paid the capital value of the loss in one very large lump sum. In many, if not most, cases, this sum would be more than the value of the land to the private party. In such cases the land should not be sold. It would not be efficient to do so. But if there were no compensation for the loss of outdoor recreation, this land would be sold and transferred to a less efficient use. Society would be made worse off. Compensation is crucial to efficient land management. Without it the privatization argument falls apart.
Let’s switch gears for a moment to the related issue of limiting access to streams in Montana and other states. Current land owners in Montana cannot legally exclude the public. Should they wish to do so, they should compensate the public for the loss of access. This could be done by having the State collect an annual “Recreation Exclusion Fee” from all land owners who wish to exclude the public from the stream on their land. This fee would be put into a trust fund to be used to further public access to streams in the State. In our example above, this fee for one land owner would be $100,000 each year. This could add up to many millions, if not billions, of dollars collected by the State Government or it could be much less if land owners are not willing to pay to exclude us from the stream. Exclusion would only be efficient in states where access is owned by the public if land owners pay this fee.
We can conclude that an auction of public land that has recreational value without compensation for those who lose access may not result in the land going to the use most valued by society (in economic terms, the highest and best use).
The problems with the selloff of public lands can be summarized below:
Selling off public lands would systematically undervalue their recreational uses.
Future uses of the land are likely to be undervalued.
Fragmented ownership would make it almost impossible to have an ecosystem wide management system, thus creating less viable fish and wildlife.
Outdoor recreation will become available only to the wealthy.
Auctioning of public land will not necessarily lead to the most efficient use of the land.
Current recreational users (you and me) would not be compensated for their loss.
Public ownership has its management problems but so does private ownership. The private ownership alternative systematically excludes you and me from the process of deciding how best to use the land and it will be systematically short sighted. Land would not be used in society’s best interest. The result would be inefficient and, more important to you and me, would lead to the end of outdoor recreation as we know it. We will be losers if this happens.
Now to answer the question I posed.
Selling off our public lands is a big mistake.
Paul B Downing, PhD
The US Government holds land in trust for you and me, its owners. The tradition and legal status of our ownership was set down in the Magna Carta and adopted by the framers of our Constitution. Hunting, fishing and other outdoor recreation on this public land has been a tradition ever since. Now some private property advocates would reverse this tradition by selling off Federal lands to private individuals and businesses or by transferring this land to individual states who would probably sell it once it is transferred since the states barely have the resources to manage the land they have now. The effect of this selloff would be to exclude us from fishing, hunting, hiking and the other outdoor activities we enjoy on this, our land.
Should we allow the sale of our land?
Before I give you my answer, let’s compare what would be different under public and private ownership. These differences are summarized as:
1. Proponents of selling our public land to private owners claim that private ownership will lead to more efficient management of the land. I will show that outcome will likely not be the case.
2. Private owners typically do not have the long term time horizon required for effective land management.
3. Switching to private ownership may lead to excessive fragmentation of ownership. This will make it almost impossible to achieve effective ecosystem wide fish and wildlife management.
4. Switching to private ownership will mean a loss of access to all but the rich.
5. A public auction will not include your or my value for access to outdoor recreation in determining how the land will be managed.
6. It is not likely that you and I will be compensated for our loss of public access as would be required by law and economic theory. Management
Under public ownership, all the citizens of our country have the right to enjoy the land. That right is controlled under regulations that restrict its use. I cannot hunt an elk any time I want. I cannot fish a stream using any method I choose and keeping any fish I wish. Regulations control the uses of public land so that it is used responsibly. These regulations seek to ensure that we all have fair and equal access to our land regardless of our economic status. They also ensure that these resources will be available for the next generation.
Private ownership of this land would lead to much different access and management. The owner could exclude us from enjoying the land. We may be granted access to the land but only if we pay a fee. The end result would be that less rich hunters, fishers and hikers (perhaps you and certainly me) would be more likely to be excluded from enjoying the land. Converting public land to private ownership would substantially reduce the public’s access to land for recreational purposes, thus taking a valuable resource from us; a resource that we have owned since the founding of our country. The average Citizen would be worse off after the sale.
But, proponents of private ownership will argue, owners in the private market have the economic incentive to use the land efficiently. The better they manage the land, the more profit they can make. Government managers do not have such an incentive because they do not get the return from doing so. That return goes to you and me. As a result, private ownership advocates argue, public land is used inefficiently. They conclude that private ownership would increase the overall value of the Country’s land to all its citizens. But this argument does not tell the whole story.
Short Term vs Long Term Land Management
Efficient use of land, as defined by the proponents of private ownership, is measured by how much money the land owner collects. This return can be divided into short term and long term profit. The possibility of collecting access fees would stimulate short-term management decisions. The owner would have an incentive to consider the effect of his management decisions on both the current and future recreational uses of the land in order to collect more access fees. But private owners are traditionally short sighted. They value current returns much more highly than the average citizen. This leads them to undervalue the effect of their land use decisions on future land use.
We can see an example of what the selloff of our public lands could look like by examining a ranch that is currently privately held. The Vermajo Ranch in New Mexico is an active cattle ranch but it is also open to the public to hunt and fish; for a fee. The fishing in its lakes and streams is great. The elk hunting is excellent. The owner, Ted Turner, hires a management team that does an excellent job of developing and preserving this land for hunting and fishing as well as cattle. Sounds good until you ask the price. It costs around $500 per day per person to stay there and fish. Hunting is much more expensive. The price excludes me and others like me from enjoying this land.
Private ranches such as this are shining examples for the private property supporters. But what happens when Ted Turner dies? We have no guarantee that this ranch will stay whole, let alone that it will be managed responsibility for outdoor recreation as well as cattle. Most ranches do not even offer access to fishing or hunting under any circumstances. Any fish or game on these ranches is out of our reach and purely accidental. Such ranches do not manage for wildlife.
Private property owners, especially corporations, are notoriously short sighted. Take as an example the mining industry. They destroy the land for other uses as they mine. True, regulations are in place to insure they rehabilitate the land when they are done so they must include this rehabilitation cost in their management decisions. The fees they pay are put in trust to be used for future restoration. Sounds good but what do we do when the company finishes mining then declares bankruptcy and these fees do not cover restoration costs? We, the previous owners of the land, are stuck with the bill. The miner does not consider how its current decisions affect the cost of restoration in the future. They just pay the fee and are done with it. We cannot guarantee that the current owners will fully pay for restoration or value future uses of the land. This means that they may well do more damage to the environment that they would if they knew they would have to pay the full costs of restoration.
There is another problem with private ownership of our land; fragmented ownership. Suppose a large parcel of public land is sold to a developer. He then sells small parcels of the land to individual owners. Each new owner can exclude others from the land. But small parcel ownership has the problem that each owner does not control enough land to effectively manage it. Collecting fees is more difficult. The land is more likely to be excluded from use by anyone other than the new owner and the supposed management benefit of private ownership is lost.
This small parcel ownership (fragmentation) has another ramification. Suppose the land was a National Forest. The trees on this land have value for timber. But this value is realized sometime in the future. If the parcel is subdivided, the timber becomes less valuable. This is because a lumbering company would have to negotiate with many owners instead of one and they would have to get unanimous agreement to cut the timber. The negotiation process would be expensive and would reduce the value of the timber below what it would have been if the parcel remained whole.
Fragmented ownership makes it near impossible to develop and implement ecosystem wide management of the land. Fragmented ownership would inhibit the free movement our wildlife needs to survive and prosper. Salmon need to be free to move up a river to spawn. Buffalo need to move from wintering low lands to high country. Fragmented private ownership places barriers to these movements. Federal and State Fish and Wildlife Managers, as well as private organizations, have been fighting this fragmentation battle for years. Selling off public land would only make this problem worse.
Again, an example can give life to this problem. In Montana many ranches have been subdivided into small holdings. This is especially true along streams where private individuals are willing to pay a premium for the land. These individuals now want to exclude fishers from accessing the stream even though State law allows such access and has for years. The new owners knew the access rules when they purchased the land but they want to change the rules after the fact. This fight between public access and private owners has been going on for a number of years. Every time it is settled in favor of public access, as it is every time, it is re-litigated by another owner of private land. Land owners have even got together to successfully pressure the State Legislature to change the law but the change was ruled unconstitutional. The same fight is taking place in Utah and other states. Should private land owners win the fight, they would gain value for their private land at the expense of the owners of the access rights now, you and me.